Estimating Allowance for Doubtful Accounts Evers Industries has a past history of uncollectible accounts, as follows.
Age Class Percent Uncollectible
Not past due 1%
1-30 days past due 3
31-60 days past due 12
61-90 days past due 30
Over 90 days past due 75
Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the chart below. Evers Industries Estimate of Allowance for Doubtful Accounts Total recelvables Percentage uncollectible Allowance for doubtful accounts Balance 1,124,500 Not Past Due 607,400 196 Days Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 233,000 121600 12% 96500 30% 66000 75%

Allowance for doubtful accounts    $ 106106 using the aging method

Explanation:  

Evers Industries

Estimate of Allowance for Doubtful Accounts

                          Balance         Not Past    Past Due  (days)

                                                    Due          (1-30)   (31-60)   (61-90)  (Over 90)

Total

Receivables        1,124,500   607,400   233,000  121600   96500   66000

Percentage

Uncollectible                            1%             3%           12%         30%      75%    

Allowance for                         6074          6990      14592     28950  49500

doubtful accounts    106106

We multiply each percent with the amount given and then add them all to get the total which is $106106 based on aging method.

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